PLANT LOCATION

AND LAYOUT
GROUP NO :- 13

SNEHA GHADGE

MEHZABEEN KHAN

PRATIKSHA SINGH

SHAHEEN SHAIKH

SADAF SIDDIQUI

DENZIL ALMEIDA

MAHENDRA GUPTA

AYUSH ANAND
  INTRODUCTION

When the Rs 1 lakh people’s car Nano was launched by Ratan Tata of Tata Sons, there was widespread jubilation
and anticipation of where the factory was going to come up. Various state governments offered attractive
concessions to the Tatas urging them to set up the facility in their state. West Bengal was selected to house the
Nano plant and work began at Singur. Not only the Tatas, but even their joint venture partners invested crores of
rupees to set up their respective facilities.

However, the location option proved to be wrong. Barely months before commercial production was to start, there
were agitations by the locals at Singur against the project. The situation got so out of hand that the Tatas were
forced to abandon their project at Singur and relocate to Sanand, Gujarat.

Facility location is the selection of suitable location or site where the factory or facility will be installed, and from
where it will function. There are two fundamental objectives to a facility location exercise. These are:

1. Minimizing cost
2. Maximizing revenue

 PLANT LOCATION AND LAYOUT

“Plant layout is the arrangement of machines, work areas and service areas within a factory”.

-- George R. Terry

Plant location refers to the choice of region and the selection of a particular site for setting up a business or
factory. But the choice is made only after considering cost and benefits of different alternative sites. It is a strategic
decision that cannot be changed once taken. If at all changed only at considerable loss, the location should be
selected as per its own requirements and circumstances. Each individual plant is a case in itself. Businessman
should try to make an attempt for optimum or ideal location.

 WHAT IS AN IDEAL LOCATION ?

An ideal location is one where the cost of the product is kept to minimum, with large market share, the least risk
and the maximum social gain. It is the place of maximum net advantage or which gives lowest unit cost of
production and distribution. For achieving this objective, small-scale entrepreneur can make use of locational
analysis for this purpose.
  SELECTION CRITERIA FOR LOCATION
 Natural or climatic conditions.
 Availability and nearness to the sources of raw material.
 Transport costs
 Access to market
 Availability of Infrastructural facilities
 Availability of skilled and non-skilled labour and technically qualified and trained managers.
 Banking and financial institutions are located nearby.
 Locations with links: to develop industrial areas or business centers result in savings and cost reductions in
transport overheads, miscellaneous expenses.
 Strategic considerations of safety and security should be given due importance.
 Government influences: Both positive and negative aspects

 FACTORS AFFECTING PLANT LOCATION DECISION

 Proximity to Customers (Markets)
 Proximity to Raw Materials
 Good Transportation Facilities
 Availability of Power
 Basic Amenities
 Government Policies
 Environmental and Community Considerations
 Proximity to Subcontractors
 Availability of Cheap Land
 Low Construction Costs
 Availability of Cheap, Skilled and Efficient Labour

 PLANT LAYOUT

A plant layout can be defined as follows:

 Plant layout refers to the arrangement of physical facilities such as machinery, equipment, furniture etc.
with in the factory building in such a manner so as to have quickest flow of material at the lowest cost and
 with the least amount of handling in processing the product from the receipt of material to the shipment
of the finished product.
 According to Riggs, “the overall objective of plant layout is to design a physical arrangement that most
economically meets the required output – quantity and quality”.
 According to J. L. Zundi, “Plant layout ideally involves allocation of space and arrangement of equipment
in such a manner that overall operating costs are minimized.

Plant layout refers to the arrangement of physical facilities such as machinery, equipment, furniture etc. within the
factory building in such a manner so as to have quickest flow of material at the lowest cost and with the least
amount of handling in processing the product from the receipt of material to the shipment of the finished product.

 OBJECTIVES OF PLANT LAYOUT

 Proper and efficient utilization of available floor space
 To ensure that work proceeds from one point to another point without any delay
 Provide enough production capacity.
 Reduce material handling costs
 Reduce hazards to personnel
 Utilise labour efficiently
 Increase employee morale
 Reduce accidents
 Provide for volume and product flexibility
 Provide ease of supervision and control
 Provide for employee safety and health
 Allow ease of maintenance
 Allow high machine or equipment utilization Improve productivity

 TYPES OF PLANT LAYOUT

1. Product or line layout

Under this, machines and equipments are arranged in one line depending upon the sequence of operations
required for the product. The raw material moves very fast from one workstation to other stations with a
minimum work in progress storage and material handling. The grouping of machines should be done keeping in
mind the following general principles. All the machine tools or other items of equipments must be placed at the
point demanded by the sequence of operations. There should no points where one line crossed another line.
Materials may be fed where they are required for assembly but not necessarily at one point. All the operations
including assembly, testing packing must be included in the line.

 ADVANTAGES:-
 Lowers total material handling cost.
 There is less work in processes.
 Better utilization of men and machines
 Less floor area is occupied by material in transit and for temporary storages.
 Greater simplicity of production control. Total production time is also minimized
  LIMITATIONS:-
 No flexibility which is generally required is obtained in this layout.
 The manufacturing cost increases with a fall in volume of production.
 If one or two lines are running light, there is a considerable machine idleness.
 A single machine break down may shut down the whole production line.
 Specialized and strict supervision is essential.

2. PROCESS OR FUNCTIONAL LAYOUT

In this type of layout machines of a similar type are arranged together at one place. E.g. Machines performing
drilling operations are arranged in the drilling department, machines performing casting operations be grouped in
the casting department. Therefore the machines are installed in the plants, which follow the process layout.
Hence, such layouts typically have drilling department, milling department, welding department, heating
department and painting department etc. The process or functional layout is followed from historical period. The
work, which has to be done, is allocated to the machines according to loading schedules with the object of
ensuring that each machine is fully loaded.

 ADVANTAGES
 There will be less duplication of machines. Thus, total investment in equipment purchase will be reduced.
 It offers better and more efficient supervision through specialization at various levels.
 There is a greater flexibility in equipment and man power thus load distribution is easily controlled.
 Better utilization of equipment available is possible.
 Break down of equipment can be easily handled by transferring work to another machine/work station.
 There will be better control of complicated or precision processes, especially where much inspection is
required.

 LIMITATIONS
 There are long material flow lines and hence the expensive handling is required.
 Total production cycle time is more owing to long distances and waiting at various points.
 Since more work is in queue and waiting for further operation hence bottle necks occur.
  Generally, more floor area is required.
 Since work does not flow through definite lines, counting and scheduling is more tedious.
 Specialization creates monotony and there will be difficult for the laid workers to find job in other
industries

3. FIXED POSITION OR LOCATION LAYOUT

In this type of layout, the major product being produced is fixed at one location. Equipment labour and
components are moved to that location. All facilities are brought and arranged around one work center. This type
of layout is not relevant for small scale entrepreneur. The following figure shows a fixed position layout regarding
shipbuilding.

 ADVANTAGES
 Material movement is reduced
 Capital investment is minimized.
 The task is usually done by gang of operators, hence continuity of operations is ensured
 Production centers are independent of each other. Hence, effective planning and loading can be made.
Thus total production cost will be reduced.
 It offers greater flexibility and allows change in product design, product mix and production volume.

 LIMITATIONS
 Highly skilled man power is required.
 Movement of machines equipment’s to production center may be time consuming.
 Complicated fixtures may be required for positioning of jobs and tools. This may increase the cost of
production